3 ASX shares raising their dividends like clockwork

These 3 ASX dividend shares like Washington H. Soul Pattinson and Co. Ltd (ASX:SOL) are raising their dividends like clockwork.

| More on:
a woman

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The current economic world is one with little growth and low dividend yields. Most businesses creating any sort of decent growth are trading at pretty high valuations.

But, there are a few businesses out there that are generating earnings growth and increasing the dividend like clockwork like these three which can outperform your job's earnings growth:

Rural Funds Group (ASX: RFF

Rural Funds aims to increase its distribution by 4% each year. It has achieved this each year since it started paying a distribution in 2014.

The farmland real estate investment trust (REIT) has a number of ways it can grow its rental income, profit and distribution. It can make accretive acquisitions, it is using its 20% retained profit to invest in productivity improvements at those farms and it benefits from rental increases built into the contracts.

It owns an appropriate amount of water entitlements and has a diverse portfolio of farm types including cattle, cotton, macadamias, almonds and vineyards.

Rural Funds currently has a distribution yield of 5.9%.

Washington H. Soul Pattinson and Co. Ltd (ASX: SOL

Soul Patts is currently increasing its half year and final dividend by 1 cent each result. That may not sound like much but it's comfortably more than inflation.

The dividend could be higher, but Soul Patts' underlying investments like Brickworks Limited (ASX: BKW) are keeping some cash for re-investment and Soul Patts itself is keeping some of the net cash paid to it for funding growth opportunities. It's this strategy that has allowed Soul Patts to materially outperform the market over the long-term.

The fact that it's invested in fairly defensive and uncorrelated investments means that its dividend could keep rising sustainably for a very long time.

Soul Patts currently has a grossed-up dividend yield of 3.7%.

Altium Limited (ASX: ALU

One of Altium's stated aims is that it's "focused on returning profit to shareholders" meaning it's "committed to growing dividends each year".

The electronic PCB company may generate a lot of dividend growth over the next decade with the company having a strong balance sheet, it's debt free and produces excellent cashflow each year compared to its profit. If profit keeps growing at more than 20% a year I expect the dividend will keep growing by a solid percentage each year too. 

The starting yield of 1% is obviously low, but the dividend is likely to grow at a very fast pace during the 2020s.

Foolish takeaway

For purely income it seems Rural Funds is the most attractive option with a good starting yield, but Soul Patts is the gold standard for growing dividends which is why it would be my pick for clockwork dividend growth.

Motley Fool contributor Tristan Harrison owns shares of Altium, RURALFUNDS STAPLED, and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia owns shares of and has recommended RURALFUNDS STAPLED and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia owns shares of Altium. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on ⏸️ Dividend Shares

A boy hold money and dressed in business suit next to money bags on a desk, indicating a dividends windfall
⏸️ Dividend Shares

The Accent (ASX:AX1) dividend has lifted by 22%

The company will reward shareholders with an increased dividend...

Read more »

a woman sits in the driver's seat of a car with her arm resting on the door with a small smile on her face, looking out of the car.
⏸️ Dividend Shares

Carsales (ASX:CAR) share price records a modest rise on dividend slash

Australia's largest online automotive and marine classifieds business notches a conservative share price rise on its latest report.

Read more »

A young entrepreneur boy catching money at his desk, indicating growth in the ASX share price or dividends
Bank Shares

ASX 200 bank shares to follow suit after CBA dividend hike: expert

Dividend investors rejoice! This expert expects more dividends to come from ASX 200 bank shares...

Read more »

sad looking petroleum worker standing next to oil drill
Share Fallers

AGL (ASX:AGL) dividend slashed. Share price down 3% on Thursday

More headwinds for the energy giant as its dividend is now in the spotlight.

Read more »

A girl looks through a microscope at money.
⏸️ Dividend Shares

The ANZ (ASX:ANZ) share price has only gained 10% in 5 years. But have the dividends paid off?

We do the math to see if it has been worth investing in ANZ shares over the long term...

Read more »

man laying on his couch with bundles of money and extremely ecstatic about high dividend returns
⏸️ Dividend Shares

The NAB (ASX:NAB) share price is flat 5 years on. But have the dividends paid off?

We calculate if it has been worth investing in NAB shares over the long run...

Read more »

two children dressed in business attire with joyous, wide-mouthed expressions count money at a desk covered in cash and sacks of money either side.
⏸️ Dividend Shares

Top-10 ASX dividend share delivers market-thumping share price gains

The Holy Grail for income stocks is to return strong capital gains as well

Read more »

happy woman looking at her laptop with notes of money coming out representing financial success and a rising share price and dividend yield
⏸️ Dividend Shares

Mining shares in the ASX 200 might unearth US$26b worth of dividends

Are shareholders about to dig some dividends?

Read more »